You Can’t Simply “Will” Your Heirs to Carry on the Family Legacy.

Is a life well-lived measured by the size of our bank accounts and how much property we acquired? Or is it measured by our relationships and the condition of them when we leave?

What we leave behind, most importantly our words and deeds, are reflected in the lives of those we touched. Are you taking time to teach your children and grandchildren about the family and legacy you want to pass on?

Long before television and smartphones, before almost anyone had money and surplus wealth of any kind, we knew that our parents and grandparents could teach us so much about living. They were the ones who had experienced life’s ups and downs, they had gained perspective and had the qualification to share their wisdom. Today as people are living longer, it’s not unusual to have four or five generations alive at one time. We have a terrific opportunity for each generation to guide and inform the generations coming after them.

After parents die, their wisdom and experience die with them unless effort is taken to learn from them. Parents need to teach the next generation about how they acquired their wealth, and the responsibilities that go with inheriting that wealth. It seems that today many people have given up on the idea that the best of what we can offer of ourselves and experiences, can be passed on to our children. We cannot share our wisdom by adding their name as a beneficiary in the will.

Parents wield a profound influence on the choices their children make. Our children often live what they learn from us whether we want to acknowledge it or not. As parents, we need to remember our children watch what we say and do. We need to model good behavior, decision making, and responsibility.

Lesson 1: No Shortcuts to True Wealth

One of the most important lessons to teach is there are no shortcuts to acquiring true wealth, be it money or wisdom. Those who take shortcuts – lottery winners, marrying for money, or inheriting a sizable estate without any preparation that it was coming – often live dysfunctional lives, with their windfall creating larger problems than they faced before.

Receiving an inheritance without any preparation can be poison to children who will destroy themselves and their own families because they know nothing about the responsibility of handling wealth. We must begin working with our children long before an inheritance is received. It is up to the parents to teach them how to handle wealth and the responsibility that comes with it.

Lesson 2: Use Wealth in Service of Others

The second most important lesson to teach is that everyone is rich when money, regardless of the amount, is used in the service of others, ultimately for family, friends and humanity. Thinking that the money we earn will just buy more stuff, and that more stuff is best, will destroy anyone slowly but surely from the inside out. According to Thomas Jefferson, the “pursuit of happiness” has to do with an internal journey to know ourselves and an external journey of selfless service to others. It is best for children to learn this from their parents at an early age.

A family, regardless of their wealth, should develop a culture that imposes discipline on the disposition of their assets. Family dynamics improve when transparency, convention, and tradition drive giving decisions. I believe money should flow to the next generation, who can release the wealth to their children in time. It will become wealth that has been gracefully and wisely relinquished – a gift that keeps on giving, a gift that cements parent-child relationships, not one that undermines and confuses.

Lesson 3: Use Money to Bring People Together

A family should use money to bring people together. Money can divide, or money can connect, money can grow relationships or money can destroy them. Money is energy, it is there to employ. If you have money, does it control you, or do you control it? The answer is found when you examine your engagement with others in your life. It’s why some wealthy people die impoverished, while some people of modest means who bask in the warm touch of family and friends die rich. Having regular conversations with the next generation provides an opportunity to frame a different set of values and leads to a different kind of relationship between parent and child and a different commitment.

Reframe the family’s charitable giving as a family project deserving of time and attention proportionate with the effort that went into making that money in the first place. Charitable giving should not be tax driven; it’s values driven, with an emphasis on need and effectiveness. Anything less mocks those in our family who came before us, whose sacrifice, hard work and deferred consumption led to the donation.

Selecting worthy causes isn’t just a process for the rich but for everyday working people who have a modest amount of wealth to pass on. Don’t underestimate how even a small gift to charity can leave a big impression on children when they are included in that decision. Every family, regardless of their wealth, needs to have family meetings.

Your children need to understand that they are your legacy, not your money and possessions. For your legacy to flourish, you must get your children involved, work with them to create something and contribute something to your community for the benefit of others.

Rick’s Tips:

There are no shortcuts to acquiring true wealth, be it money or wisdom.

Everyone is rich when money, regardless of the amount, is used in the service of others.

Every family, regardless of their wealth, needs to have family meetings.

Will Your Money Last Through Retirement?

No one wants to run out of money. But without goals and a solid plan, how can you know for sure whether you’re on the right track?

Will I be able to maintain my current lifestyle?

What will my monthly income be in retirement?

Can I protect my hard-earned savings and still have the income I want?